Investing.com - The Japanese stock market witnessed a significant drop in the Nikkei 225, which fell from its highest point in over three decades. This downturn followed an impressive eight-day rally that had investors eager to capitalize on their gains.
Initially, the day began with promising prospects for the Nikkei index, reaching a new high of 31,352.53 – last observed back in August 1990. However, after midday break, gains were reduced and more sellers entered the market. The benchmark experienced rapid declines before ultimately closing down by 0.42% at 30,957.8.
In an unexpected turn of events during the final moments of trading, Toyota Motor Corp (TYO:7203) saw its shares tumble by nearly five percent - becoming the largest decliner within the Nikkei index. Concurrently, TOPIX index also faced losses amounting to approximately two-thirds of one percent (0.66%) and settled at a value of 2,16149.
Market analysts attribute this sudden shift primarily to profit-taking among investors due to concerns about potential overvaluation issues surrounding various stocks listed on Tokyo Stock Exchange (TSE). Chief Market Strategist Masahiro Ichikawa from Sumitomo Mitsui DS Asset Management commented that "the trend higher for the Nikkei is likely to continue" despite current fluctuations.
Foreign investments have been driving this upward trajectory for Japanese shares lately thanks largely to TSE's focus on improved corporate governance measures along with increased interest shown by renowned investor Warren Buffett towards Japanese trading companies.